"How people treat you is their karma, how you react is yours." - Wayne Dyer
So I know this sounds really mean, but because I am very transparent I will say it anyway- I truly believe that there is a special place in business hell for people who sign contracts and do not fulfill the financial obligations. I know it sounds harsh, but what goes around comes around and the entrepreneur community is very small. The last thing you should want on your track record is that you have not fulfilled financial obligations to another business owner. When you have a lack of integrity in business, it will always come back to haunt you- whether it's next month or in five years.
It's been on my heart to write this blog for some time, as I have several clients who have dealt with this issue and I have dealt with it as well. Here are four tips that will help you if you ever face this issue:
Understand Integrity: This was unfortunately my biggest challenge in dealing with non-paying clients. I always felt that because I maintain a certain level of integrity that others would do the same, BOY WAS I WRONG. While you do not want to walk into a contract with the mindset that you will not be paid at all or won't be paid on time, you should do your best to pay your bills in advance so that if something should occur with a bad client you are not impacted as much.
Signed Contract: Without having this, you have no leg to stand on with attempting to collect past due balances. In the early days of my business, I was very relaxed with contracts. It was not at all uncommon at that time for me to be working with a client whom I did not have a legally binding contract with. Because of that, I lost out on a lot of revenue. I don't want any of you making that same mistake, understand the importance of getting your contracts signed and never give clients access to anything without it! Use resources like Docusign or Echosign to make it easier for you and your client to get the contract signed. Also, having an attorney review your contract BEFOREHAND is a must. While it is an investment, you will be grateful down the road.
Collections Process: You have to have a collections process in place and stick to it. The biggest mistake you can make is waiting to experience a non-paying client and then putting your collections process in place. If you are allowing clients to pay on a retainer basis as opposed to paying fees all up front, you need to have a collections process. I believe that you should try to handle the matter in-house first by having someone from your team speak with the client. If things need to be escalated from there then do so, but try your best to handle the matter in-house first.
Lawyer On Speed Dial: This is a MUST. Every small business owner should have some sort of legal protection to back them up. Why? Because if you don't then people will definitely call your bluff. Having a lawyer to consult you on these matters is extremely beneficial as they know exactly what legal means you can use to collect on past due payments. This is also needed because you don't want people thinking that they can just sign a contract with you and be in breach of that contract without legal action being taken. If your contract says that legal action will be taken, then you need to protect yourself and your brand by doing so.
While these situations unfortunately occur in business, the most important thing is to remember how blessed you truly are. I have never had a situation like this happen with a client without God sending me four clients to make up for that one bad apple. When you are good to people and you maintain your integrity, you will ALWAYS be taken care of! Keep these tips in mind and don't sweat it!
THIS WEEK'S FIRE YOUR BOSS TIP: Thank God For Your Gift!
The best way to thank God for your gift is to walk in your purpose. This means knowing your calling and answering to it, no matter how challenging it may be. You might not see the light at the end of the tunnel, but there is favor wherever he directs you and he rewards those who trust him. Find your purpose and own it, your life will never be the same.